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Critics push back on Ethereum EIP-8363 staking overhaul

The proposal would taper staking rewards until issuance falls to zero once 50% of Ether is staked, but opponents warn it could disrupt DeFi lending and weaken decentralization.

Reported · Written up by our desk · Market Structure

Ethereum is facing a wave of criticism over a proposed staking change, with Cointelegraph reporting that backlash is centered on Ethereum Improvement Proposal EIP-8363, also called Tapered Issuance Burn.

EIP-8363 is designed to gradually reduce staking rewards as more Ether is locked to secure the network, eventually cutting new protocol issuance to zero once 50% of Ether’s supply is staked. The proposal’s authors argue that additional staking delivers diminishing security returns, while diluting holders who do not stake.

Critics, including DeFi builders, staking providers, and institutional investors, say the shift could harm decentralization, disrupt Ethereum’s lending markets, and undermine confidence in the network’s monetary policy. Cointelegraph also highlights concerns that security gains become increasingly marginal even as validators continue to receive rewards under the current issuance structure.

Cointelegraph notes that Ethereum already has about 41.5 million ETH staked, earning 2.67% and representing 34.07% of the supply, citing the Ethereum Validator Queue. It adds that the amount staked has risen 15% since the start of 2026, and one industry figure argues market forces may already be slowing participation without changing issuance.

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